Don't Let the IRS Scam Put the Skids on Buying Your New Car
Published February 25, 2016
Scammers rip off over $26 million from victims with threatening voicemails and phone calls
Each year, many of us anxiously wait for the month of May for our IRS tax refund checks and many use this windfall of several thousand dollars to buy a new car. With this large amount of cash floating around, many foreign scammers using U.S. based ringleader accomplices have inserted themselves into this cloud of cash and have invented clever ways to cause thousands of victims to part with their money, dashing their hopes of buying a new car any time soon.
We have exclusive video for you below of an actual IRS Scam phone call that we received on our voicemail system. We'll also analyze the different parts of this scam to help you identify and recognize many other related scams you might come across. This will keep you from losing your new car before you even go shopping for it.
What is the IRS Scam?
This scam operates in several modes, but the most popular mode the last two years involves the scammers calling you and leaving automated threatening voicemails. These messages have laughable grammar, stating that the IRS is filing a lawsuit against you and they leave a phone number for you to call them. When you speak to them it is usually some joker with a foreign accent, most likely in India, who threatens you that the police are on the way to arrest you in an hour if you don't pay your taxes. They allege you owe the taxes immediately.
The scammer tells you that you could be facing five to ten years in jail for your crime, which you have course not actually committed. They are folks committing the crime! The less informed among us are then tricked into rushing out to Western Union or MoneyGram to wire the funds to "avoid prison time." Sometimes they are sent into stores like Walmart to buy huge sums of untraceable prepaid cards like Green Dot, Visa gift cards, etc., and supply the card number to the phony "IRS agent," who then takes all the funds off your untraceable cards. Now they have all your money and you have been duped.
IRS scammers often rip off victims more than once
If you're really naïve, like many of the victims are, the scammers come back to the well for more. They figure if you fell for it the first time, they expect a good percentage of victims will foolishly send in more money. When they come back to hit you up for more, they tell you after their audit they found additional amounts that you screwed the IRS out of and now you have to pay them $3,000 more. Some people have sent in over $15,000 before they realized they were duped. There goes that new car you thought you were going to buy with your income tax refund. There goes eating next month!
The Treasury Inspector General for Tax Administration (TIGTA) announced they have received complaints from about 896,000 intended victims since October 2013 and that over 5,000 victims have paid more than $26.5 million in this IRS scam. I bet the actual loss is higher, as these are just reports they are aware of. The scam also nailed former NFL offensive Lineman Frank Garcia out of $4,000. You may recall he previously played for the Carolina Panthers, St. Louis Rams and the Arizona Cardinals.
These scammers have also attempted and failed to trick us here at CarBuyingTips.com. Even my wife heard the voicemail, then panicked, screaming at me that "the IRS is suing us, what did we do wrong?" We, of course, did nothing wrong. I knew immediately it was a fraud. How did I know so quickly that this was a fraud without hearing the message first? I'm smarter than any scammer, we'll show you how.
See below our CarBuyingTips.com exclusive video of this IRS Scam phone call, then we'll walk you through all the pathetically obvious red flags and some not so obvious telltale signs that can help you prevent falling victim to any of these or similar scams:
A script of the actual robo-dialed voicemail they leave for you
Here is a text script of the actual phony IRS phone call voicemail the scammers left for us. Keep in mind they constantly change the phone number they are using. Who knows, maybe different scammers are given a rotation, much like servers in a restaurant. I'll work this victim, you work the next victim. Take a look at our transcription of their script from their voicemail:
Hello… We have been trying to reach you. This call is officially a final notice from IRS… Internal Revenue Service. The reason of this call is to inform you that IRS is filing lawsuit against you. To get more information about this case file, please call immediately on our department number (509) 207-4031. I repeat (509) 207-4031. Thank You.
Obvious red flags that should scream at you that this is a fraud
Let's examine each of the above 4 lines of their phony script where we'll show you how it's an obvious fraud just from a poorly written script viewpoint. Here is the analysis:
- Hello... We have been trying to reach you.
OK, so you're trying to reach me. Who are you? They don't even identify who they are yet, which most organizations would tell you right off the bat. And what's with all the robot voice clicks and dropouts? That sounds more like Max Headroom than the IRS! Red flag goes up.
- This call is officially a final notice from IRS... Internal Revenue Service...
Wow, this is really bad grammar and sounds like the stupidity of grammar that someone from overseas might talk with. This is officially a final notice? Who the heck talks like that? Not the IRS! Final notice huh? Where were all the previous notices? Oh that's right, there were none! This is another red flag.
- The reason of this call is to inform you that IRS is filing lawsuit against you.
I'm still rolling on the floor laughing from line 2) above, now we have this other line of their bogus script with bad grammar to keep me laughing all night. The 5,000 previous victims could have avoided this fraud if they just used a bit of common sense and heard the unprofessional verbiage and grammar.
I mean come on, haven't these suckers all seen enough Nigerian Scam emails in the last 20 years to know when they are being played as part of a phishing scam?
- To get more information about this case file, please call immediately on our department number (509) 207-4031. I repeat (509) 207-4031.
This line too has bad grammar; they want us to call "on our department number." That is not verbiage that a serious professional would ever send out. Also, they changed the pronoun from us with "I repeat."
Why would the scammers bother with such a low conversion rate?
So check this out, it is just like advertisers sending out junk mail. With 5,000 victims out of 896,000 reported attempts, we have a .5% conversion rate for the scammer. You know that their actual conversion rate must be much lower, because you can bet there are many hundreds of thousands of intended victims that are not reported in attempts mentioned above. So why do scammers waste their time?
Apparently, this is quite lucrative for the scammers, so it is not really a time waster for them. Although they have a teeny tiny conversion rate that I would not wish on my worst competitor, they have networks of morally flexible operators standing by for the few gold nuggets of victims who return their call in a panicked bid to avoid jail time.
Once these scammers have you on the phone, you can bet that conversion rate into a $5,000 rip-off is quite high and lucrative for them. They don't really do much work for their scam to pay off handsomely, so the low conversion rate is irrelevant. They use illegal robot-dialers to call everyone automatically by computer, so they are not really doing any work at all by using a computer and blasting out the phony voicemail to hundreds of thousands of people.
The only work these scammers have to do is take the calls from the suckers handing themselves over to the fraudulent operators on a silver platter. It really is a brilliant organized fraud.
How to tell the IRS Scam is a fraud and not really the IRS
The reason why many of these scammers have been able to dupe over 5,000 people is that most Americans have no clue how the IRS operates, and so they are sucked into the scammer's vortex by the sense of an urgent need to avoid jail time. Here is why I knew this was a scam the minute my wife informed me the voicmail said that the IRS was suing us.
Internal Revenue Service never sends you a voicemail, they notify you in writing first
So let's examine how the IRS really operates when you are in trouble so you can avoid being ignorant and get sucked into a scam. First of all issues with the IRS have a due process timeline. If they ever have an problem with your tax filing or something does not jive, the IRS never sends you a voicemail, it's always in writing first.
We all make mistakes on our taxes, me included. All income tax issues you have with the Internal Revenue Service start off small; they send you an official letter on IRS letterhead with a barcode and pertinent information about your filing, including part of your Social Security number. They state the exact problem, usually telling you they disagree with the amount of your refund.
If the IRS was really suing you, Sheriff's deputies would serve you papers
I still can't believe all these people fell for this scam, not knowing how real lawsuits work. They should have known there was no real lawsuit. If you know anyone who was ever evicted, foreclosed on, or otherwise sued in court, you should know that all lawsuits are announced to the defendant in person by your local Sheriff's department deputies who hand you the official court complaint as turned in by the plaintiff. That is how the court knows you were properly served and that you received the summons to appear. The courts don't do it via voicemail and not even by postal mail, it is always in person by a process server.
If you have ever had to file a court case against anyone, you already know that you have to pay about $100 extra that goes to the Sheriff to serve your summons to the defendant. There is never a phone call made to any defendant announcing a lawsuit.
The IRS gives you a chance to dispute their claims; scammers create false threats of arrest
The real Internal Revenue Service also gives you a chance to dispute their claim, in writing, with an included form or they invite you to use extra paper. The real IRS doesn't start right off the bat telling you that they are filing a lawsuit against you; that is just ridiculous.
They have to give you a chance to correct the error, and there is usually a small penalty and interest. Once all written forms of settlement fail, then the IRS might file a lawsuit against you and have you served with a summons to appear in court.
The real IRS never asks for payment via Western Union or prepaid credit cards
The IRS usually has you pay online electronically with a bank transfer or you mail in a check to a known and trusted IRS address. They would never ever send you to put money onto gift cards, or wire money by Western Union, MoneyGram, PayPal agents, etc. Any time someone you don't know and love tells you to send them money via Western Union or similar methods, run as a fast as you can; it is a fraud.
Any time you are told to call the IRS, or your bank, or any other entity you do business with, always go directly to their website and call them directly. Never click on links or use phone numbers supplied by the sending party. This way you avoid ever talking to a scammer to begin with. If these victims had just done this one simple task, they would have been saved from losing thousands of dollars.
Scammers tend to threaten immediate action against you and demand money which is very effective in lighting a fire under many victims' butts and motivates them to pay up now without delay. They sometimes threaten foreigners with deportation and other immigration woes and they love to threaten the elderly folks with jail time as well. No one is safe from these lying cheating sociopaths.
You need to constantly stay up to date with the latest IRS "Dirty Dozen" scams which they warn you about, such as this Internal Revenue Service press release right on the IRS.gov web site.
Good luck out there, stay sharp, and don't let scammers rob you of your next new car. Let us know if this scam is tried on you. Report any phone numbers the scammers leave for you in the comments below, so other victims who search the phone number will find it here and be forewarned of the scam and dodge a bullet.
About The Author: Jeff Ostroff
A lifelong consumer advocate with over 20 years of unparalleled expertise, Jeff is the Founder, CEO and Editor-In-Chief of CarBuyingTips.com. As chief consumer advocate, he oversees a team of experts who cover all aspects of buying and selling new and used cars including leasing and financing.
For decades, Jeff has been the recognized authority on vehicle purchasing, sought out often by the media for his decades of experience and commentary, for live call-in business radio talk shows and is cited often by the press for his expertise in savvy car shopping methods and preventing consumer scams and online fraud. Jeff has been quoted in: CNN, MSNBC, Forbes, New York Times, Consumer Reports, Wall Street Journal and many more.